Home ownership rates: Another function of the local marketplace

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Published Date 7/29/2024

Owner occupied. It’s a term that applies to neighborhoods where there are few renters and people own their own homes. In today’s real estate market, with high mortgage rates and soaring home prices, the dream of homeownership has escaped the reach of many Americans, however.

That’s why Realtor.com’s Patrick Djordjevic tries to clear up why it might come as a surprise that some of the poorest states across the nation have more homeowners than their more affluent counterparts.

West Virginia leads all states with a 77% homeownership rate, followed closely by Delaware (75.7%), Mississippi (75.5%), Maine (75.5%), and Wyoming (74.5%), according to U.S. Census data. How, you ask, can people afford a home there? Well for one thing, these states generally have vastly lower average incomes compared with the rest of the country. And you can’t sell a house to a population that simply can’t swing the mortgage payments.

“A few factors are at play here,” says Realtor’s economist Hannah Jones. “States with lower median income levels tend to have lower home prices as well, even when considered relative to earnings.” Conversely, states with the lowest homeownership rate include some of the nation’s highest-earning states: New York, California, Nevada, Hawaii, and Massachusetts.

“Though California, New York, and Massachusetts are among the highest-earning states in the U.S., buyers also see the highest home prices relative to income levels,” says Jones.

Home prices were between 8.8 and 9.8 times higher than the typical income level in these three states (using June 2024 median list price), compared with just 4.8 times higher in West Virginia.

“States with a primary, massive metro area—such as New York City and Boston—also see lower homeownership levels due to the large renter population in these highly populated metros,” Jones says.

Realtor, TBWS

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